Citibank predicted that Brent crude would rise to $120 a barrel in the near term, noting that oil markets do not adequately reflect the risks of prolonged supply disruptions and broader potential extreme risks.
The bank stated on Tuesday that the optimistic scenario is for Brent crude prices to reach $150 a barrel, assuming the Strait of Hormuz is gradually reopened during the third quarter.
Oil prices fell at settlement on Tuesday after U.S. Vice President J.D. Vance said the United States and Iran had made progress in talks and that neither side wanted to resume military action.
Brent crude futures for July delivery settled at $111.28 a barrel today.
The bank said that oil prices in 2027 are extremely difficult to predict, but the baseline scenario expects Brent prices to range between $80 and $90 a barrel, assuming that Iran will maintain control over flows through the Strait of Hormuz and balance oil exports with demand growth forecasts.
The bank expects oil demand growth to contract by 0.6 million barrels per day in 2026.
The bank estimates that global oil inventories will fall by about one billion barrels this year.
Citi said: “Our estimates indicate that most of these declines will occur outside of China, and that inventories outside of China are on track to fall to their lowest levels recorded between 2011 and 2014.”
